: Sleep is a robust behavior described in organisms from flies to humans. While considerable progress has been made in understanding sleep related phenomena, the function of sleep is yet to be determined. One of the suggested functions of sleep is enhancement of plasticity and consolidation of memory. Specifically, sleep has been suggested to modulate neural networks undergoing experience-driven changes. Recent studies suggested that adult neurogenesis plays an important role in learning, especially in hippocampal-dependent tasks (Shors et al. ?00, Shors et al. ?01). This raises the possibility that the enhancing eftects of sleep on plasticity and memory are mediated, in part, by effects on neurogenesis. Here I propose that during sleep, glucocorticoid levels induced by mild stress (e.g., novel stimuli) and arousal are actively suppressed, thus promoting neurogenesis. A series of experiments is suggested that will help understand the interaction of sleep and glucocorticoid homeostasis mechanisms, and their effects on sleep.